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Chap 1 pfin



Chapter 1, Finance 8 Power Point

Chapter 1, Finance 8 Power Point



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    Chap 1 pfin Chap 1 pfin Presentation Transcript

    • Understanding the Financial Planning Process #1
    • The Rewards of Sound Financial Planning
      • Maintain and improve standard of living
      • Control spending in order to live well today and tomorrow
      • Accumulate wealth
    • Improving Your Standard of Living
    • Average American Family
    • The Personal Financial Planning Process
      • S ystematic process that considers important elements of an individual’s financial affairs in order to fulfill financial goals
    • Six-Step Financial Planning Process
      • 1. Define financial goals
      • 2. Develop financial plans and strategies
      • 3. Implement financial plans and strategies
      • 4. Develop and implement budgets
      • 5. Use financial statements to evaluate results
      • 6. Redefine goals, revise plans as situations change
    • The Role of Money
      • Medium of exchange used to measure value
      • Utility amount of satisfaction derived from purchases versus cost
      • Link to personal psychological concepts and key role in personal relationships
    • Attain Your Financial Goals
      • Set specific goals and focus on results
      • Make goals realistic
      • Involve family members and others
      • Prioritize goals and set a time frame
    • Put Target Dates on Financial Goals
      • Short-term in the next year
      • Intermediate-term the next 2-5 years
      • Long-term 6 years or more
    • From Goals to Plans: A Lifetime of Planning
      • Early childhood
      • High school and college
      • Family formation
      • Career development
      • Pre-retirement
      • Retirement
    • Personal Financial Planning Life Cycle
    • How a $1,000 Investment Grows over Time
    • Plans to Achieve Your Financial Goals
      • Asset acquisition planning
      • Liability and insurance planning
      • Savings and investment planning
      • Employee benefits planning
      • Tax planning
      • Retirement and estate planning
    • Using Professional Financial Planners
      • Types of planners
      • Commission-based – earn commission on financial products sold
      • Fee-only – charge fees based on complexity of the plan
    • The Planning Environment
      • Financial planning takes place in a dynamic economic environment created by the actions of
        • Government
        • Business
        • Consumers
    • Financial Planning Environment
    • Government
      • Federal government plays a major role in regulating the level of economic activity
      • Taxation and regulation constrain personal financial planning
    • The Economy
      • Monetary Policy
      • Controls money supply
      • Used to stimulate or contract economic growth
      • Fiscal Policy
      • Controls levels of taxation
      • Sets levels of government spending
    • The Economy
      • Economic Cycles
      • Stages related to employment and production levels
      • Growth measured by changes in GDP
      • Inflation
      • Measured by changes in CPI
      • Affects purchasing power and interest rates
      • Affects financial plans and goals
    • The Economic Cycle
    • What Determines Your Personal Income?
      • Demographics and income
        • Age, marital status
      • Education
      • Where you live
      • Career